4 Ways To Get The Best Deal On Your Homeowner's Insurance
As a new homeowner, you have plenty of expenses to deal with, which is why you are going to want to do what you can to keep your homeowner's insurance costs as low as possible. Although this is an unavoidable expense, there are steps you can take to lower the cost of carrying homeowner's insurance.
Know What You Are Willing to Pay for a Deductible
First, you need to know what you are willing to pay for a deductible. When you have damage to your home and file a claim with your insurance company, the deductible is the portion of the claim you pay before the insurance company pays the rest. For example, if your home experiences $5,000 in damage that is covered through your policy, and your deductible is $1,000, you would pay $1,000 for the damage, and your insurance would pay the remaining $4,000. You have to pay this amount any time you make a claim.
The more you are willing to pay, and thus the more risk and financial responsibility you are ready to take on yourself, generally the bigger the discount you will get on your premium.
Know How Much Coverage You Actually Need
Second, you need to figure out how much coverage you actually need. When you purchase insurance, you should not be looking at the market value of your home. The market value considers the cost of the property and other factors that don't matter when it comes to rebuilding your home. Instead, you need to figure out what the replacement costs would be for your home. The replacement cost is what it would cost to rebuild your house from scratch if it was completely destroyed. Based on where you live and home values, this could be more or less than the market value. You want to ensure that you will have the money you need to rebuild and replace your home if it is a total loss.
Know What Will Not Be Covered
Third, it is essential to understand what will not be covered under your policy. Certain types of damage are not covered, such as floods or earthquakes, that you may need to purchase additional insurance for. If you have any high-value items that exceed the value limit of a single item of personal property, you may need to add riders to your insurance to cover those items.
Know What to Combine Together
Finally, it is essential to know when and what of your insurance should be combined. Combining policies is often an easy way to get a discount on both of your policies and lower your insurance costs.
When it comes to home insurance, know what is covered, and ensure you have enough coverage. Figure out what type of deductible you can afford and combine your policies together if possible.
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